Earticle

Michael Kremer analyzed the existing gap in income and wage between more advanced countries and less advanced countries with the help of complementarity in skilled labor. Kremer argued that the marginal productivity of one worker will improve when he or she works with a high-skilled labor. Consequently, firms using more complex production process will try to hire more skilled labor in order to complete the production tasks successfully. This study employs the main idea of Michael Kremer's research in order to explain the existing differences in R&D activities across countries. We argue that there exists complementarity among research personnels in R&D projects. That is, the R&D projects are likely to be successful when researchers work with other highly skilled researchers. It is thus important for research institutes to hire more scientists and engineers with better research skills in order to increase the success ratio of R&D activities. This study sheds some light on R&D policies that affect successful completion of national R&D projects.